N.Y. Fed Seeks Dismissal of Examiner Suit Over Goldman

Nov. 15 (Bloomberg) -- The Federal Reserve Bank of New York
asked a judge to dismiss a lawsuit filed by a former bank
examiner who alleged she was fired for refusing to change
findings about Goldman Sachs Group Inc.’s conflict of interest
policy.

The New York Fed said in a filing yesterday in Manhattan
federal court that Carmen Segarra “flagrantly violated” the
bank’s policies, federal regulations and federal criminal law by
making confidential supervisory information public in her
lawsuit and circulating it to the news media without permission
from the Board of Governors of the Federal Reserve System.

The Fed also said Segarra can’t sue under the federal
whistle-blower statute because her concerns about Goldman
Sachs’s policy didn’t involve a violation of law or regulations.
While she claimed Goldman lacked a firm-wide conflict-of-interest policy, Goldman’s policies were actually available and
posted on its public website, the Fed said.

“The gravamen of the complaint is not a whistle-blower’s
provision of information, but a non-actionable disagreement
between a supervised employee and more senior colleagues over
how to interpret a Federal Reserve policy,” lawyers for the Fed
wrote.

The bank said it fired Segarra for cause and not because
she identified a possible violation of law or regulation.

Segarra said in a lawsuit filed in October that she
examined the legal and compliance divisions of Goldman Sachs in
late 2011 and early 2012 and found that they lacked a policy
that conformed with federal banking regulations. She alleges she
was fired because she refused to withdraw her findings.

Goldman Sachs said then that it has a comprehensive
approach to addressing conflicts through firmwide and divisional
policies and infrastructure.

The case is Segarra v. Federal Reserve Bank of New York,13-cv-07173, U.S. District Court, Southern District of New York
(Manhattan).

To contact the reporter on this story:
Christie Smythe in federal court in Brooklyn, New York at